It’s fair to assume that most business owners want to develop a long-term relationship with an insurance agent. They want this because they don’t really like insurance, nor do they bother to read insurance policies. They wish someone else would just take care of it for them! By partnering with a professional agent who does like insurance and actually does read policies, it’s one less worry for a business owner, and a big one.
The way the insurance market is set up is not really in the best interests of the business owner. Many small business owners are constantly being approached by insurance agents that may represent just a handful of carriers. These agents are really just sales agents for the insurance company. The insurance company might tell the agent something like, “we’re really competitive for workers compensation in the restaurant business.” These small agents will then call all the restaurants and say, “I can get it for you cheaper”. As a result, many small businesses have multiple agents because they have been buying based on price. If insurance policies were a commodity, that might be okay, but, if you’ve ever read one, you find they’re really complicated contracts. What the small business owner really needs is a broker that is not trying to feed a few carriers, but will truly place the insurance with the right carrier and the right price.
So, how do you make sure a business insurance agent is professional and reputable? Here’s what to look for:
- Independence. Independent agents represent a variety of different companies—not just one. They can evaluate and compare the products of several insurance companies to find the right combination of coverage and value for each individual client.
- Licensing by the state.
- Number and names of companies the agent represents.
- Number of years the agent and agency have been in business.
- The agent’s professional designations. For example, CPCU (Chartered Property and Casualty Underwriter) and CLU (Chartered Life Underwriter) are among the industry’s most rigorous and prestigious designations.
- Areas of specialization. Some agents and agencies have experience in specialized products, such as insurance for a restaurant, an IT consultant, or a home business.
- Recommendations and referrals. How did you hear about the agent and the agency? Did someone you trust refer you?
- Full-service capability. Is this a full-service agency for business, personal, health, and disability products?
- Service representatives. Who will handle your account for routine updates and transactions?
- Claims help. Ask if the agent plays a role in handling and tracking claims. Will the agent help resolve disputes that might arise with an insurance company?
- Policy review. Does the agency occasionally review and update policies to make sure your insurance is keeping pace with changes in your situation?
- Industry associations. Does your agent participate in any local, state, or national trade associations? These activities often signify professionalism and a commitment to continuing education in the insurance field.
What kind of relationship do you have with your agent? How do you feel about their services? How do you know you’re in the best position with your business insurance?